16th July 2014
Government’s welfare reforms are forcing people into financial hardship
Jamie Reed MP has secured a debate in Parliament on the impact of welfare reforms on West Cumbria. The Welfare Reform Act was passed in 2012 and came into effect in April 2013 meaning it has now been in force for over a year.
The debate today follows the publication of the Cumbria Welfare Reform Commission report in late June. The Commission found that the bedroom tax ‘has no rationale in Cumbria’.
Click here to view the House of Commons Hansard record of the debate
Here is Jamie’s speech from the debate:
Here is Jamie’s speech from the debate:
(Check against delivery)
Thank you Mr Chairman, it is a pleasure to serve under your chairmanship. The social cost of this Governments welfare reforms is extremely high. This has been keenly felt in West Cumbria. The Welfare Reform Act received Royal Assent in March 2012 and has now been in force for over a year. This debate today is crucial in assessing some of the devastating consequences of this Act on the people in West Cumbria.
Before I begin, I want to express my thanks to The Right Reverend James Newcome, the Bishop of Carlisle, Willie Slavin – an incredible community champion in my constituency – and the work of the Cumbria Welfare Reform Commission. The report they have produced forensically details the impact of the Government’s reforms and it informs much of what I wish to say here today. If the Minister hasn’t read it, she ought to. In the introduction to the Commission’s report, the Bishop of Carlisle makes it clear that it is not a party political report but that “We hope that our findings and recommendations will be of general use to politicians, civil servants, volunteers and benefit claimants alike. We also believe that, if implemented, those recommendations would ultimately help to save money rather than costing the Exchequer more.”
I also wish to thank the many people in West Cumbria, and throughout the country, who do so much to help those in need. Staff in support roles and the many volunteers who do their best to ensure that hose who need support, get it, deserve high praise. I dread to think how much worse the situation would be if we were left without their compassion and commitment.
The reforms seen in the last two years have been all encompassing. There has been changes to support for in-work benefits and unemployed adults, changes to support for adults with disabilities, the introduction of the bedroom tax and more. The impact of these on individuals and families has been extremely tough and I will touch on each of these in the debate here today. But, that is not all; the impact on households resonates throughout the entire community and beyond. The cumulative impact on individual families within a community can have major consequences for local esteem, pride, self-worth and the local economy. To fully understand the ramifications of the Government’s ham-fisted reforms, we must not only examine the financial hardship that they are causing, but also the damage done to communities like mine and to the people who live within them.
The harrowing testimonies of my constituents and the work done by the Cumbria Welfare Reform Commission are tangible evidence that families and communities in West Cumbria are feeling the painful brunt of the Government’s reforms.
Working Age Benefits and Universal Credits
The opposition has consistently supported the principle of universal credit. This has the potential to simplify the working age benefits system and to make it much clearer to people how their financial position would change on moving from unemployment into work.
This will only be possible if it is implemented properly and if there is a significant improvement in the relationship between DWP and claimaints.
The Cumbria Welfare Reform Commission highlighted serious concerns on how this is being done to date.
Capacity and Access Issues
The welfare reforms of this Government will require enormous local capacity to ensure that changes are delivered with minimal disruption, but the Cumbria Welfare Reform Commission Report details a worrying situation that will inevitably lead to many serious problems when Universal Credit is eventually rolled out in ‘Late 2014/Early 2015’. It says:
Locally, “Commissioners heard of significant capacity problems within DWP, and many current cases of delays in deciding claims. Department for Work and Pensions has recently reduced staffing levels in Cumbria and Commissioners were told that while many back-to-work advisors genuinely wanted to help, claimants felt they were ‘overwhelmed’. One adviser said he had 400 cases per fortnight; one client said he had not seen an adviser in a year.”
This situation will only get worse. The success of any reforms will live or die by the ease, or in this case, the difficulty in getting access to services, advice and support. Before Universal Credit is even rolled out, the Government is failing my constituents.
One JSA Claimant told the commission: “The system is in meltdown… I am no longer able to contact local jobcentre. There is a national helpline, but it has long delays. I can’t afford to stay on the phone for hours.”
A Young mother who previously claimed Job Seeker’s Allowance commented: “I hate the way [DWP] is run, they don’t care. You phone the call centre and they say ‘it’s not our fault, the computer’s not working’. I hate being on benefits.”
A Welfare Adviser in Whitehaven has slammed access to over-the-phone advice saying “DWP Call Centre – it’s the most expensive way I know to listen to Vivaldi.”
This is a situation that cannot be allowed to continue and the Minister must address these points in his response and if she can’t, I hope she will commit to writing to me detailing the steps she will take in order to improve the situation.
A breakdown in the relationship between claimants and clients and the DWP can have dire consequences. When people find themselves in times of hardship, additional stress and worrying can cause significant distress. This brings me onto an issue that has impacted on many of my constituents.
The Chief Executive of the Citizen’s Advice Bureau, Gillian Guy, when describing the current system of sanctions said: “The regime is not only self-defeating, it is also poorly administered.”
The evidence just does not exist to support the imposition of disproportionately heavy sanctions. A Joseph Rowntree Foundation international review shows the limited benefits of doing so and the Cumbria Commission found that research conducted in the USA which suggests some success from sanctions in getting people off benefits is down to claimants dropping out of the system altogether rather than going into decent work. Studies from Europe shows that the use of sanctions is likely to lead to worse employment outcomes such as lower pay. The Commission argues that “this is because the threat or use of sanctions makes people take lower-quality jobs than if they had been allowed to wait for a better opportunity.”
With regards to Zero Hour Contracts, the Commission states: “At present their wages plus benefits still leave many unable to pay the basics such as food and shelter. In particular there is a risk of a vicious circle whereby people on a zero hours contract can have their benefits cut if they can’t demonstrate that they can look for other work, but not only does uncertainty about hours required to work in these contracts make this availability difficult, but some employers use exclusivity clauses in their own contracts preventing employees from taking on other work in the rest of their time.”
This paints a desperate picture of the working poor.
In a damning indictment of Government policy, the Department told the Commission “sanctions make the vulnerable more vulnerable.” How can the Minister allow this to continue? What is the Government doing to address this?
The Government definition of vulnerable is: “An individual who is identified as having complex needs and/or requires additional support to enable them to access DWP benefits and use our services.”
This is too narrow a definition which will result in many people needing additional support falling and through the cracks.
The Commission found that “many people sanctioned in recent months have been sanctioned despite exhibiting vulnerability – indeed the sanction is often a result of such an expression.”
Impact of Welfare Reforms on Cumbria’s Adults with disabilities
I now want to move on to the impact of gvt reforms on adults with disabilities. Disabled people are twice as likely as non-disabled people to live in poverty. Those unable to work are disproportionately dependent on benefit rates and therefore feel the changes more acutely.
The Government have estimated that, through the introduction of the Personal Independence Payment, the claimant count will fall by 23% compared with the number on Disability Living Allowance. In Cumbria, there are 4300 DLA claimants so that means at least 1000 individuals will lose their support.
The Inquiry by Baroness Grey-Thompson found that severely disabled people living alone or with only a young carer will lose between £28 and £58 a week. 100,000 disabled children stand to lost £28 a week and 116,000 disabled people who work will lose around £40 a week.
These are significant sums of money and losing this amount will have serious consequences on claimants and their families. Outside of this detached, self-obsessed, increasingly weird Westminster club – let’s not forget what is happening to people out there.
The Commission reports: “Where there are delays and stoppage of benefits, some families also face financial meltdown, leaning on family and friends for money and often becoming dependent on doorstep lenders.”
This has the potential to create a perfect storm of financial hardship, no support and mounting debt. It is a scenario that the Government’s reforms are actively facilitating.
Impact of changes to housing benefit.
This brings me on to the impact of changes to housing benefit. The biggest reform in this field is clearly the Government’s Bedroom Tax which affects approximately 4750 households across Cumbria.
This is simply an ill-thought out policy. The unintended and far reaching consequences of the bedroom tax are well known.
The Commission undertook to find out why people ‘under-occupy’. The cast majority of people do not under-occupy consciously – they don’t choose to do it. They find themselves in that position usually as a result of family breakdown, children leaving home or the death of a family member. The Government should realise that these events mean that most people would prefer to remain in their own homes, close to existing neighbours, family and and support networks with which they are familiar.
Government figures show that two thirds of those affected are disabled. When the cumulative impact of these Welfare Reforms is assessed, it is clear why many are facing serious hardship. For many, a ‘spare room’ is not a luxury they don’t want to sacrifice, but an absolute necessity. I have heard reports of a recently separated father having to sleep on his sofa so that his children can have a bed to sleep in when they visit. Or where returning university students – who can’t remain in halls of residence outside of term time – cannot move back in with their parents as they no longer have a room for them.
The Government’s Bedroom Tax is a bluntand ineffective tool. Families forced to move out of social housing into the private rented sector will cost the taxpayer more in higher rents and more will be lost through arrears and evictions. The National Housing Federation say that two thirds of those hit by the bedroom tax cannot find the money to pay their rents and one in seven are at risk of eviction. Just consider that for a moment – that is the effect of government policy.
It has been said by many of my colleagues, but it is worth repeating, let there be no doubt that Labour will repeal the Bedroom Tax.
As I said earlier, there isn’t just a financial cost to the families affected. There is a cost to the local communities too. The report by the Cumbria Welfare Reform Commission highlights a deliberate policy to reduce child density in areas of concentrated social housing to reduce and manage anti-social behaviour and create more constructive living environments. The bedroom tax undermines these policies.
I’m sure the minister will claim that this isn’t a tax, but it is. People are forced to pay. They can’t move to a smaller property because there aren’t any. In Cumbria, in order for Housing Associations to house all under-occupying residents correctly, Cumbria would need to re-build the equivalent of 7.5% of our total rented stock as one-bedroomed properties.
The DWP’s own report the “Evaluation of Removal of the Spare Room Subsidy”, which was published yesterday shows that only 4.6% of claimants affected have moved to a smaller home within the social sector. The report contained some startling statistics: 80% of affected claimants say that it is difficult to afford the amount of rent they pay. More than half of claimants report that they very often run out of money before the end of the week or month.
I hope the Minister is able to offer some meaningful advice to those who can’t afford the Bedroom tax, but can’t move because there is no housing available.
Impact – Foodbanks
The impact of these changes can be seen throughout my constituency. There are wards in Copeland where almost a third of children live in poverty and in Sandwith, this is even higher. Foodbank use continues to rise and shows no sign of slowing. In the last year, it was up by a third and now almost 2000 people rely on them. There is a clear correlation between the areas with high child poverty and the highest prevalence of food bank usage. In one ward, Harbour, almost 400 people, including over 70 children used a foodbank in the last financial year.
We have repeatedly warned the Government that the effect of their policies would be most keenly felt by the most vulnerable in our society.
Almost one in every three referrals to a food bank has been because of a delay in benefit payments and a further 17% are due to benefit changes – almost half overall.
The final verdict on any Government is based on how it treats the poorest and most vulnerable in society during the hardest of times. The rise in the use of foodbanks, the reliance on pay day lenders and the financial hardship faced by many, brought on by, or at least significantly exacerbated by some of the Government’s most pernicious welfare reforms is a damning indictment of their time in office. The Government’s legacy, the legacy of the Secretary of State, Ministers and the Prime Minister is one of a growing class of working poor, of disabled people in hardship and of too many people living in turmoil and anguish caused by uncertainly, inflexibility and instability. The Government should heed the advice of the Cumbria Welfare Reform Commission and the stakeholders who contributed to the report and then review its policies to secure successful implementation of Universal Credits, ensure that sanctions aren’t unfairly applied, reduce the complexity and delays in PIP and Work Capability Assessments and to stop pushing families into hardship as a result of the Bedroom Tax.